In accounting, a credit is one of the two foundational terms used in double-entry bookkeeping (the other being a debit). When a transaction occurs, the credit entry represents either an increase in liabilities or equity accounts, or a decrease in asset accounts. For instance, if a business takes a loan, the loan amount will be credited to the loans payable account, which is a liability.

In practical terms, credits are used in various scenarios. For example, when a company earns revenue by making a sale, the revenue account is credited to reflect the increase in income. Similarly, when a payment is made to a supplier that reduces a liability, the accounts payable liability is credited. Accountants often ensure that for every credit, there is a corresponding debit in the accounting records to maintain balance in the system. This is in accordance with the accounting principle that every financial transaction will have equal moving parts in the credits and debits.